There are a lot of terms flying around at the moment, including whether ASX 200 shares are in a bull or bear market.
It is true that many shares have been hammered lower as coronavirus concerns have hit the S&P/ASX 200 Index (ASX: XJO) hard.
But what exactly do these terms mean and are we in either type of situation right now?
What are bull and bear markets?
The definitions for these things can vary a little, but generally, it's a 20% price move in a short space of time.
A bull market happens when investors are "bullish" and shares have climbed 20% higher in a couple of months. A bear market would then be the opposite, where share prices fall 20% or more.
When coronavirus fears took hold in February, ASX 200 shares entered a bear market, slumping 36.32% between 21 February and 23 March.
Those are some big share price moves that hit shares in many sectors. However, there has been some optimism around the COVID-19 crisis and the impact of economic stimulus on the economy.
Are ASX 200 shares in either situation?
That optimism has been shown in recent share price gains in ASX 200 shares. In fact, as of Tuesday, the S&P/ASX 200 Index was back in a bull market.
The benchmark index was up 20.72% to 5,488.10 points on Tuesday compared to where it closed on 23 March.
However, I think we're currently in some sort of limbo. That seems somewhat appropriate given the uncertainty we still have around the economy and where ASX 200 shares are headed.
I personally think the August reporting season will be a huge indicator of where markets will close out 2020. There is some quiet optimism around COVID-19, and we even saw some encouraging unemployment statistics yesterday.
There's a long road ahead, but we're closer to a bull market than a bear market as it currently stands.
Foolish takeaway
If you're a buy and hold investor, now could be a good time to buy.
ASX 200 shares have been hammered lower and some could be bargain buys right now. If you're investing in good quality companies with a long-term time horizon, that could be just the trick to building long-term wealth for the future.
